Sometimes a straightforward explanation and an apology for what went wrong in the hospital goes a long way toward preventing medical malpractice litigation and improving patient safety.

That’s what Michelle Mello, JD, PhD, and her colleagues found in a study published Oct. 2 in Health Affairs.

Mello, a professor of health research and policy and of law at Stanford University, is the lead author of the study. The senior author is Kenneth Sands, former senior vice president at Beth Israel Deaconess Medical Center.

Medical injuries are a leading cause of death in the United States. The lawsuits they spawn are also a major concern for physicians and health-care facilities. So hospital risk managers and liability insurers are experimenting with new approaches to resolving these disputes that channel them away from litigation.

The focus is on meeting patients’ needs without requiring them to sue. Hospitals disclose accidents to patients, investigate and explain why they occurred, apologize and, in cases in which the harm was due to a medical error, offer compensation and reassurance that steps will be taken to keep it from happening again.

Positive results

The study reports on the outcome of a so-called communication-and-resolution program at two large Massachusetts hospital systems. Mello and her co-authors found that the program not only yielded positive results in terms of liability costs but also led to significant patient safety improvements.

“In these programs, hospitals scrutinize every serious harm event to answer the question, ‘What can we learn?’” Mello said. “Traditionally, a risk manager’s focus has been on the patients who complain about the care or threaten to sue. But every patient deserves to know that what happened to them is being taken seriously.”

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Despite concerns that telling patients about errors and proactively offering compensation could cause liability costs to skyrocket, of the 989 adverse events reviewed for the study from 2013 to 2015, only 5 percent led to malpractice claims or lawsuits. And when the program did lead to compensation, the median payment was $75,000. By comparison, the median payment nationwide in 2015 when plaintiffs prevailed in malpractice lawsuits was about $225,000, Mello noted.

“Our findings suggest that communication-and-resolution programs will not lead to higher liability costs when hospitals adhere to their commitment to offer compensation proactively,” the authors wrote.

Pilot program

The authors focused on a program called CARe — Communication, Apology and Resolution — at six Massachusetts hospitals: Beth Israel Deaconess Medical Center and Baystate Medical Center, and two of each center’s community hospitals.

The hospitals demonstrated good adherence to the program protocol, the authors found. Physicians were supportive of the approach but did ask for better communication about the program and what was happening with their patients.

The low percentage of events that led to litigation should reassure hospitals concerned about the risks of being honest with patients, the authors wrote. A likely explanation, according to Mello, is that explaining why adverse events occurred defused patients’ anger. About three-quarters of the time, adverse events were not actually due to error, the study said. Rather, malpractice claims frequently arise when plaintiffs perceive that the health care providers communicated poorly or attempted to cover up negligence, the authors noted.

“Given the rarity with which communication-and-resolution events resulted in settlements, it is reasonable to wonder whether the programs are worth the time they require,” the authors wrote, “but risk managers in our study thought they were. By providing explanations and expressions of sympathy for harms not arising from negligence, communication-and-resolution programs may avert lawsuits springing from misunderstanding.”

Objectives and improved safety

The CARe objectives are to improve transparency surrounding events, improve patient safety, reduce lawsuits and support clinicians in disclosing error or injury.

Medical events were bumped to a CARe evaluation if they met a severity threshold of either causing permanent or temporary harm that led to an extended hospitalization, required an invasive procedure or led to at least three outpatient visits.

Of the 989 total events studied by the authors, 60 of them entered the CARe program because the hospital received notice that the patient intended to sue. Another 929 entered the program when an adverse event was reported that allegedly exceeded the severity threshold, or that met other criteria.

The protocol called for compensation to be proactively offered whenever a violation of the standard of care caused serious harm. Only 9 percent of cases met these criteria. The largest payment made was $2 million. In 181 events, in which compensation criteria weren’t met, hospitals offered to waive medical bills or made other modest gestures, like giving the patients meal vouchers and gift cards. About three-quarters of injuries didn’t qualify for compensation because the standard of care was judged to have been met — a proportion that is consistent with prior studies of medical injuries. About a third of the injuries weren’t caused by the medical care: For example, a patient contracted an infection in the hospital but died from other causes.

“These programs are usually talked about as a way to resolve cases of medical error, but what they do more often is encourage communication with patients about non-error events — as well as systematic evaluation of each event for patient-safety lessons,” Mello said.

The authors also noted that communication-and-resolution programs “can help hospitals foster a culture of transparency by supporting clinicians in making disclosures.”

The safety interventions identified in the CARe investigations included new labeling for high-risk medications, color-coded socks for patients at risk for falls, radio frequency identification tags for surgical sponges, improved interpreter services, improvements for managing the selection of implantables after surgery, and a multidisciplinary checklist for breech deliveries.

Other authors of the study are affiliated with Harvard, Tufts, Baystate Medical Center, and Beth Israel Deaconess Medical Center.

Rural areas of China have made remarkable progress in reducing adult mortality within the past 15 years yet broadened health insurance was not a casual factor in that decline, according to a new study by an international research team that includes Asia Health Policy Program Director Karen Eggleston.

The New Cooperative Medical Scheme (NCMS), a government-subsidized insurance program that began in 2002-03, expanded to cover all of rural China within a decade. Examining NCMS and cause-specific mortality data for a sample of 72 counties between 2004 and 2012, the researchers found that there were no significant effects of health insurance expansion on increased life expectancy.

The study, published in the September issue of Health Affairs, showed results consistent with previous studies that also did not find a correlation between insurance and survival, although much research confirms NCMS increased access to healthcare, including preventive services, and shielded families from high health expenditures.

Commenting on the study, Eggleston said population health policies remain central to China’s efforts to increase life expectancy and to bridge the gap between rural and urban areas.

Eggleston also noted that multiple factors beyond the availability of health care determine how long people live, and anticipates the research team will continue to explore the impacts of NCMS by extending the study to look at infants and youth.

Read the study (may require subscription) and view a related article on the Stanford Scope blog.

Stanford Health Policy’s newest faculty member, Joshua Salomon, believes that one urgent need in global health research is to improve forecasts of the patterns and trends that are the major causes of death and disease.

Salomon, who is leaving leaving his position as professor of global health at the Harvard T.H. Chan School of Public Health to join Stanford on Aug. 1, works on modeling of infectious and chronic diseases and their associated intervention strategies, as well as methods for economic evaluation of public health programs and ways to measure the global burden of disease.

And he looks at the potential impact and cost effectiveness of new health technologies.

“Projections of future trends in health are crucial to formulating policy,” said Salomon, who has a PhD from Harvard. “To think strategically about the technologies and policies that would make the biggest impact on health over the next 20 to 50 years, we really need to start by understanding the range of likely trends in major health challenges over the coming decades.”

Stanford, he said, offers him a “rich collaborative environment” to better learn from advances in forecasting across a range of other disciplines, such as economics, political science, and environmental science.

“With a better picture of what the world is likely to look like over the next 50 years — and what are going to be the most pressing health problems — we can invest wisely and put ourselves in a position to respond more effectively.”

Salomon is also the director of the Prevention Policy Modeling Lab, which is funded by a five-year award from the Centers for Disease Control and Prevention. The consortium represents the collaborative research of experts from Massachusetts General Hospital, Boston Medical Center, Dana Farber Cancer Institute, Yale School of Public Health, Brown University School of Public Health, and the Massachusetts Department of Public Health and.

He will continue directing the lab from Stanford and intends to bring in new research threads from his colleagues here on the Farm. The lab works on a wide range of projects dealing with policy analysis for hepatitis, sexually transmitted infections and diseases such as HIV, and tuberculosis.

“It’s a rewarding grant for me to work on because, unlike a lot of modeling projects, the work that we do really starts from urgent public health questions that policymakers have,” he said. “All of the questions that we are working on are questions that originated directly from discussions with CDC and other public health partners.”

With Salomon’s move to Stanford, the university gains a dynamic duo.

Grace Lee joins Stanford as the Associate Chief Medical Officer at Lucile Packard Children's Hospital in the fall, 2017.

His wife, Grace Lee, MD, MPH, joins in the fall as the Associate Chief Medical Officer at Lucile Packard Children’s Hospital. As a professor of population medicine at Harvard Pilgrim Health Care Institute & Harvard Medical School, Lee has led research in vaccine safety in the FDA-funded Post-licensure Rapid Immunization Safety Monitoring (PRISM) program and the CDC-funded Vaccine Safety Datalink, which monitors the safety of vaccines and studies rare and adverse reactions from immunizations.

She has also examined the impact of financial penalties on rates of healthcare-associated infections, as the principal investigator of an AHRQ-funded study, as well as developed novel surveillance definitions for ventilator-related events in neonates and children.

While at Stanford, Lee said, she intends “to find opportunities to enhance the learning health system approach to improve patient outcomes and population health.”

Salomon has spent his entire career as a collaborator on the Global Burden of Disease project, the world’s most comprehensive epidemiological study commissioned by the World Bank in 1990, which tracks mortality and morbidity from major diseases, injuries and risks factors.

“The study has made a major contribution to global public health because before this study we just didn’t have a comprehensive, systematic understanding of the things that cause death and disability in low- and middle-income countries. But now we do,” he said. “It’s hugely ambitious and very sweeping in scope — and a lot of my work is around providing the evidence we need to inform policy.”

Much of Salomon’s work is global in nature. He’s most recently focused on older adults in one rural South African community, which has a high prevalence of HIV and one of the world’s highest levels of hypertension. His research there aims to inform urgent prevention initiatives tailored to older adults where HIV and cardiovascular risks are moderate or high, as in similar communities in sub-Saharan Africa.

“People don’t expect a high level of ongoing HIV transmission in older adults,” he said. “The double burden that we find, with a very high level of HIV, as well as the high prevalence of diabetes and heart disease, creates enormous strains on the health-care system.”

Tens of thousands of Americans die from drug overdoses every year — around 50,000 in 2015 — and the number has been steadily climbing for at least the last decade and a half, according to the National Institute on Drug Abuse. Yet a team of Stanford neuroscientists and legal scholars argues that the nation’s drug policies are at times exactly the opposite from what science-based policies would look like.

Stanford Health Policy affiliate Keith Humphreys, a professor of psychiatry and behavioral science, and colleagues argue in the journal Science that basing public policy on neuroscience rather than on a desire to punish addicts would improve lives, including those of the victims of drug-related crimes.

“We have an opioid epidemic that looks like it’s going to be deadlier than AIDS, but the criminal justice system handles drug addiction in almost exactly opposite of what neuroscience and other behavioral sciences would suggest,” said Keith Humphreys, a professor of psychiatry and behavioral sciences and one of the leaders of the Stanford Neurosciences Institute’s Neurochoice Big Idea Initiative.

A central problem, the authors argue, is that drug use warps the brain’s decision-making mechanisms, so that what matters most to a person dealing with addiction is the here and now, not the possibility of a trip up the river a few months or years from today.

“We have relied heavily on the length of a prison term as our primary lever for trying to influence drug use and drug-related crime,” said Robert MacCoun, a professor of law and senior fellow at the Freeman Spogli Institute for International Studies. “But such sanction enhancements are psychologically remote and premised on an unrealistic model of rational planning with a long time horizon, which just isn’t consistent with how drug users behave.”

What might work better, Humphreys said, is smaller, more immediate incentives and punishments – perhaps a meal voucher in exchange for passing a drug test, along with daily monitoring.

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About two-thirds of American patients see doctors who receive payments from drug companies, but almost none of them know it.

In a collaborative study between Drexel, Stanford and Harvard, researchers found that 65 percent of participants had visited a doctor within the last year who had received payments or gifts from pharmaceutical or medical device firms.

Payments to physicians can take the form of meals, travel, gifts, speaking fees and research.

Only 5 percent of participants knew that their doctor had received these payments.

“The concern is that physicians with financial ties to drug and device companies may be more likely to recommend those companies' products to their patients, even when other choices would be better for the patient, or just as good but less costly,” said Michelle Mello, the Stanford author and a professor of law and of health research and policy.

Open Payments, which reports pharmaceutical and device industry payments to physicians, was set up as part of the Physician Payment Sunshine Act, a provision of the Affordable Care Act (ACA). The website exists to make industry payment information available to the public.

But the study found that only 12 percent of patients knew this information was accessible. The authors stated that the act’s impact is highly dependent on whether patients know about it.

“Transparency can act as a deterrent for doctors to refrain from behaviors that reflect badly on them and are also not good for their patients,” said Genevieve Pham-Kanter, the lead author and an assistant professor at Drexel’s Dornsife School of Public Health.

Drug and device companies tend to target “key opinion leaders” who are likely to influence the choices of other physicians. During the year studied, the average American physician received $193 in payments. However, the median payment for doctors visited by patients in the study was much higher, $510 for the year.

“We may be lulled into thinking this isn’t a big deal because the average payment amount across all doctors is low,” said Pham-Kanter. “But that obscures the fact that most people are seeing doctors who receive the largest payments.”

Payments vary widely across specialties. Among patients surveyed, 85 percent of those who saw an orthopedic surgeon saw a doctor who had received payments. The next highest was obstetrics and gynecology physicians at 77 percent.

“Drug companies have long known that even small gifts to physicians can be influential, and research validates the notion that they tend to induce feelings of reciprocity,” said Mello.

Despite potential changes to the ACA, Mello believes the Sunshine Act is here to stay. The current version of the American Health Care bill, which would repeal and replace the ACA, does not dismantle it.

This leaves the question of how policymakers can make information about payments to physicians more visible to patients. The authors suggested that the Centers for Medicare and Medicaid Services (CMS) could provide a one-stop shop for patients to view industry payments and other information about their providers online. Mello added that private insurers could make this information available on their “Find a Physician” websites.

“Finding the physician who is right for you depends on a lot of factors,” said Mello. “Whether a physician accepts money from industry may or may not be important to you, but my general view is that the more informed these choices are, the better they will be for patients.”

Medicare Post-election by Stanford Health Policy on Exposure

Stanford Health Policy faculty members Michelle Mello, David Studdert and Laurence Baker discuss repealing the Affordable Care Act (ACA) and how it could affect health coverage in the United States.

Now that the United States has elected a Republican president and Congress, what is likely to happen to the Affordable Care Act (ACA)?

Michelle Mello and David Studdert: Exactly what will happen is unclear at this point, particularly since President-elect Trump’s own position on the ACA seems to be evolving by the day. In an interview on Nov. 11, he said he is interested in keeping some of the key provisions of the law, such as a ban on insurers discriminating on the basis of pre-existing conditions and provisions allowing young people to stay on their parents’ plans until age 26. But his opposition to other provisions, including the cornerstone provision requiring individuals to purchase insurance coverage, likely will remain. At this point, about the only thing one can say with certainty is that substantial change is coming.

Is the ACA likely to be repealed fully, or will some components be spared?

Mello/Studdert: On the campaign trail, President-elect Trump said repeatedly that repealing Obamacare is a priority. House Republicans have said the same. A complete repeal seems unlikely in the short term, though. There’s more opposition to some provisions of the act than to others, and millions of Americans now depend on health insurance coverage made available through the ACA. More likely, Republicans will target certain key elements – the individual mandate, minimum essential coverage rules, the subsidies available to low-income purchasers of health insurance and federal financing arrangements for the Medicaid program. Eliminating all of these features would spell the end of Obamacare as we know it. Eliminating any one of them would seriously threaten its viability, because the ACA’s strategy depends on having all major legs of the stool in place.

What is the legal process for repeal, and what issues would likely arise?

Mello/Studdert: Although Republicans will have a majority in the House and Senate, they fall just short of a filibuster-proof majority (60 votes) in the Senate. This is why a repeal is not likely to occur – at least not straight away – unless several Senate Democrats break ranks in the vote. A more likely scenario is that Republicans will use the budget reconciliation process to make the kind of changes mentioned above. Bills of this kind require only a simple 51-vote majority in the Senate, which they have.

Laurence Baker: Republicans have substantial ability to remove parts of the law under budget reconciliation. They can make changes to aspects of the ACA that involve financial in- and outflows to the federal government, but not other things. Reconciliation thus allows them to make changes to the major things like the mandate – because it involves a tax penalty – the subsidies and Medicaid. But they would not be easily able to repeal things like the exchange structures, guaranteed offers of insurance regardless of health status and other provisions. Guaranteed issue would be a real problem for insurance companies without the mandate, so repealing one but not the other threatens significant disruptions in insurance markets.

Most of the discussions thus far have focused on efforts to repeal the ACA’s expanding coverage aspects, but there are other aspects of the ACA that could be addressed. The ACA set up and funds the Center for Medicare and Medicaid Innovation (CMMI) and Patient-Centered Outcomes Research Institute (PCORI), two organizations that have not been discussed much in the repeal debates and which are seen by some Republicans in a more positive light. The ACA also makes changes to Medicare payments. It seems likely that repeal debates will focus more on coverage and less on these things, but it’s hard to tell at this point.

How will this affect Americans who current receive subsidies for health insurance?

Mello/Studdert: Elimination of the subsidies would have a major effect on the ACA’s core objective to cover the uninsured. By 2017, about 25 million people will have purchased their health insurance on the exchanges set up under the ACA, and about three-quarters of them will receive subsidies to help make premiums affordable. If the subsidies disappear, we should expect that health insurance will become unaffordable for many of these people or no longer look like a good deal. The tax credits and health savings accounts currently being discussed won’t make up for what is lost, and many people who currently have insurance can be expected to drop it. Elimination of the individual mandate will further open the way for this to happen.

Baker: The reality of the health care system is that there are not easily available alternatives to the ACA that would protect coverage and be palatable to broad groups of Republicans. Single-payer, or national health insurance, is a non-starter, so they’d be left with market-oriented reforms, and there are not obvious ways to pursue those without at least some core features of the ACA. Most of the proposals recently put forward for a replacement, including those highlighted by the Trump campaign, like cross-state competition, tax credits for insurance purchase and block granting Medicaid, would not really offer coverage to a large number of the people who would lose it under repeal. So a key question is what alternatives the Republicans come up with. In a similar way, the ACA and its provisions have become increasingly woven into our insurance system. Insurers and employers, among others, have made decisions and investments incorporating the ACA. Undoing those threatens disruptions and political challenges.

Michelle Mello is a professor of law and of health research and policy.

David Studdert is a professor of law and of medicine.

Laurence Baker is a professor of health research and policy, chair of the Department of Health Research and Policy in the School of Medicine and a senior fellow at the Stanford Institute for Economic Policy Research.

Few people understand the high costs of medical services in the United States better than David Chan, a practicing physician and Stanford economist specializing in health care. But even Chan isn’t immune from sticker shock at the doctor’s office.

On a recent visit to his doctor, Chan underwent a routine test for seasonal allergies. He figured it would cost about $500. The actual charge was closer to $5,000.

“I should be one of health care’s most informed customers,” says Chan, who is a faculty member at Stanford Health Policy. “But like most people, I didn’t think to ask the price for the test and my doctor probably didn’t know it, anyway.”

To Chan, a faculty fellow at the Stanford Institute for Economic Policy Research and assistant professor at the Stanford School of Medicine, the experience illustrates what’s hobbling U.S. health care.

Although much research into health economics has focused on issues related to insurance, the delivery of patient care — specifically, how to lower costs and manage quality at the ground level — “is really where health care becomes a black box,” says Chan. Economics haven’t figured out why costs and patient outcomes vary widely, even from one hospital to the next in the same city.

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Health policy expert Bob Kocher likes to show a slide of the signature page of the Affordable Care Act, which he helped draft when he worked in the White House.

The mottled page shows an official time stamp of March 23, 2010, and the choppy signature of President Obama, who had to use the 22 pens he would later gift each member of Congress who helped him pass the landmark health-care law.

“We thought it would be pretty simple,” Kocher recalled with a grin. “We had 60 Democrats in the Senate and a huge majority in the House, a popular president. But then you saw what happened.”

Kocher was the keynote speaker at Health Policy through 2020: The ACA, Payment Reform and Global Challenges, a half-day symposium of speakers and panels covering some of the greatest challenges facing health care and policy here at home and abroad.

“Everything that you could imagine that would throw a monkey wrench into it, did,” said Kocher, a physician and partner at the Silicon Valley venture capital firm, Venrock, which invests in health-care and technology startups.

Six years after its rocky start — and ongoing threats to repeal the law by Republicans — Kocher still believes the ACA has had a tremendously important impact on the nation.

“Despite the single worst launch of a website in the history of the internet,” he said, 20 million more Americans now have access to health care; 13 million more are privately insured by their companies; and 7 million more are enrolled in Medicaid.

“I believe the ACA is working better than expected by virtue of the fact that there’s nobody in the ecosystem who is not behaving differently,” Kocher said.

Large employers have been forced to engage with their employees about the costs and quality of their health plans, and hospitals are adopting new technology by “liberating their data” with electronic medical records and embracing telemedicine, Kocher said.

“And for the first time, you see patients beginning to engage with new technologies and their doctors willing to entertain new models.”

Kocher, who specializes in investing in healthcare IT and services, said technology would eventually strip away some of the cost of patient care.

“One of the fun parts of my job as a venture capitalist is that I get to see a lot of these embryonic ideas and many of them have powerful ways to pull down costs without hurting quality,” he said. “We’ll have the technology and coordinated care, and data that helps guide the care, so I’m more hopeful than ever about being a patient.”

Kocher, a consulting professor at Stanford Medicine, was one of 15 speakers at the symposium to launch Stanford Health Policy, a community of faculty, physicians, scholars and students across the campus who are focused on improving health care and policy here at home and around the world.

Precision Health

Stanford School of Medicine Dean Lloyd B. Minor shared what he called “some surprising statistics” with the 200 people at the symposium on Oct. 14.

When looking at a pie chart representing the determinants of health, Minor said, only 5 percent are genetically based, 20 percent are based on health care and another 20 percent are due to behavioral factors.

But a full 55 percent of the determinants of health are socially and environmentally determined, Minor said, and that presents challenges for academic medical centers.

“I’m really excited in that I believe that we are beginning to come up with some ways we can address that need, as a leading academic medical center, to chart the future for how we can improve the delivery of health care in our country and then ultimately around the world,” Minor said. “For us, that vision for how we fulfill that need begins with what we describe as precision health.”

Minor said precision medicine, now embraced by the Obama administration, is about using genomics, big data science and personalization in order to individualize the treatment of acute diseases such as cancer, heart and neurological diseases.

“It’s about understanding the determinants and predisposing factors of disease in being able to more effectively intervene earlier,” he said. “And of course there’s no better place to do that than at Stanford because our academic medical center is such an integral part of this great research university.”

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The ACA Moving Forward

Kocher, who often lectures in health economics and policy courses at Stanford, conceded there are serious problems with Obamacare and offered some solutions moving forward.

But the climbing cost of health care and prescription drugs in the United States — which continue to outpace the economy and job growth — is his first concern.

Health insurance on average costs a family of four is $18,000 a year.

“That’s the price of a Corolla,” he said, referring to Toyota’s compact car. “The idea that you’re effectively buying a new car every year doesn’t feel like we’re getting the right amount of cost pressure on the system that we need. So I think that’s going to be the most fundamental problem going forward.”

Despite the gnashing of teeth over what would become of the ACA under a Trump or Clinton administration, Kocher predicted few changes.

“If Hillary Clinton wins, her priorities are actually going to be totally separate from ACA tweaks,” he said, adding that she likely would first focus on K-through-12 education, work on infrastructure spending and then international affairs.

“The odds that she wants to relive 1993 seems implausible to me,” he said.

As first lady, she pushed President Bill Clinton’s universal health-care plan with a mandate for all employers to provide health insurance coverage to all employees. The Health Security Act was widely condemned by conservatives and the health insurance industry and after a rancorous year of debate and counter-proposals, it died.

And what happens to the ACA if Donald Trump is elected president on Nov. 8?

“I can’t bring myself to comment,” Kocher said, lowering his head and chuckling.

He quickly moved on to some suggestions to make health care work better and faster.

“The first thing we need is to make these adolescent exchanges grow into adults and be stable and work better,” Kocher said of the health insurance marketplaces, which have foundered in some states and thrived in others.

He said the Covered California exchange, which insures some 1.7 million Californians, is the only exchange working really well because it has large bidding regions, doesn’t let all insurance providers into the system and does great outreach to young, healthy people.

Secondly, he said, the market power of hospitals has become too strong.

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“I realize there are some hospital leaders in the room and I salute you — you’ve done many things right, including getting market power,” Kocher said, addressing David Entwistle and Chris Dawes, the CEOs of Stanford Health Care and Lucile Packard Children’s Hospital, respectively, who also spoke at the symposium.

“But we need to figure out how to make the demand side of the equation more balanced with the supply side.”

He called health care today “massively inefficient” and “insanely unaffordable,” and said the average hospital stay is now $6,000 in the United States.

Kocher said he recently took his daughter to an emergency room and was charged $52 for a Tylenol. He told them he was a doctor and offered a Tylenol from his backpack.

“But I was told I couldn’t because of the safety of the hospital,” he said, shaking his head.

Kocher said hospitals must be accountable for their quality of the care and fined for failure to achieve promised quality indicators. As hospitals continue to bundle services and acquire private practices and physicians, costs have not gone down as expected.

Instead, hospital prices nationally have risen 6 to 9 percent in the last five years, faster than the rate of inflation. Perhaps, he suggested, some procedures and services should be tied to Medicare rates above a certain percentage of market share. And federally subsidized drug prices should be tied to patient income, not the facilities they use.

Kocher said there continues to be great debate over how high the penalty should be for those who decline to join a health exchange if they are uninsured by an employer.

The annual fee for not having insurance in 2016 is $695 per adult and $347.50 per child.

A higher mandate, he said, would get a lot more people into the system.

“But there’s no chance Congress is going to think about that.”

You can watch all the videos from the event here: 

Health Policy through 2020 by Stanford Health Policy on Exposure

There is much debate among health policy researchers about the performance of the Medicare Advantage plans, which are sold and run by private insurance companies, but are regulated by the government to provide Medicare benefits.

Enrollment in Medicare Advantage plans — mostly commonly HMOs and PPOs — grew from 5.4 million consumers in 2005 to 16.8 million in 2015, or about 31 percent of the Medicare population, according to the Kaiser Family Foundation.

Some argue the private alternative to the traditional insurance program for seniors is less expensive than the public programs; others say it’s just the opposite. And still others argue that that the government overpays for people enrolled in private plans since traditional Medicare could have covered these patients for less money.  But there had not been broad analyses of the prices actually paid by these plans.

Now, researchers from Stanford Medicine, the Stanford Law School and the Graduate School of Business have conducted one of the largest systematic analyses of the prices that Medicare Advantage plans pay to doctors and hospitals, relative to the prices paid by Medicare fee-for-services or commercial plans.

They found Medicare Advantage plans actually pays 8 percent less to hospitals for their services than traditional Medicare. If you make adjustments for the smaller, cheaper network of hospitals that Advantage plans allow their patients to use, the program pays 5.6 percent less to hospitals than FFS Medicare.

The researchers shared their findings in an online article in Health Affairs this week.

“The surprise is that Medicare Advantage is paying hospitals less,” said lead author Laurence C. Baker, professor of health research and policy at Stanford Medicine and a senior fellow at the Stanford Institute for Economic Policy Research. 

“That suggests that in an era when there are real questions about escalating health-care costs, we may want to think more about the potential benefits of Medicare Advantage plans,” Baker said. “It seems they are negotiating better prices.”

Either way, the savings or losses are always going to impact the patient.

“If you’re looking at it as a question of policy, this may be useful,” Baker said. “In the long run, we could pay less taxes to support the Medicare program and maybe people in Medicare Advantage would get to share in those savings.”

The other co-authors of the study are M. Kate Bundorf, professor of health research and policy and a faculty research fellow at the National Bureau of Economic Research; Aileen M. Devlin, a research fellow at the Law School and Daniel P. Kessler, a professor in the Law School and the Graduate School of Business.

They used data from Medicare and the Health Care Cost Institute to identify the prices paid for hospital services by Medicare Advantage, FFS Medicare and commercial plans in 2009, 2011 and 2012.

The data included information from Aetna, Humana, and UnitedHealthcare on approximately 40 million individuals who represent all 50 states, accounting for 27 percent of the nonelderly population covered by commercial insurance, and 31 percent of the elderly Medicare Advantage population.

The authors also found the rates paid to hospitals by commercial plans were much higher than those of either Medicare Advantage or FFS Medicare, and that these rates are continuing to grow.

Some of the difference is a result of the much higher prices commercial plans pay for very profitable services such as orthopedics and interventional cardiology.

“However, commercial plans pay higher prices than FFS Medicare for almost all types of admissions in almost all geographic areas,” they wrote. “Thus, our work echoes the growing concerns expressed by several researchers about the consequences of high commercial-plan prices for health spending.”